China PPI stays flat in Feb

BEIJING - China's Producer Price Index (PPI), a main gauge of inflation at the wholesale level, remained unchanged in February from a year earlier, the National Bureau of Statistics (NBS) said Friday. 

The zero-growth reading, the lowest since December 2009, further eased from 0.7 percent in January, after hitting a 31-month high of 7.5 percent in July last year, NBS data showed. 

The PPI grew 0.1 percent from January to February, after recording month on month drops for four straight months since October last year, the NBS said in a statement on its website. 

Meanwhile, producer purchase prices grew 1 percent year-on-year in February and 0.1 percent from a month ago, the NBS said. 

In the first two months of this year, the PPI climbed 0.4 percent year-on-year, while producer purchase prices gained 1.5 percent during the period, the NBS said. 

Room for further declines in PPI growth seems small, analysts said, citing that rising prices of major international commodities, particularly crude oil, are again pushing up costs of production materials. 

Prices of production materials increased 0.2 percent month on month in February, according to the NBS. 

"Resurging global commodity prices, especially the price of crude oil, will undoubtedly raise costs for domestic manufacturing and service industries, pushing up consumer prices," said Chen Kexin, an analyst with the distribution productivity promotion center of China Commerce. 

About 55 types of 100 commodities tracked by 100PPI.com, a major Chinese commodity data provider, saw price gains in February, with prices of agricultural products rising the most due to bad weather in South America. 

China Merchants Securities, based in the southern city of Shenzhen, predicted that PPI growth will pick up in the second quarter of the year. 

The NBS also announced that the year-on-year growth of the consumer price index, a main gauge of inflation, dropped to 3.2 percent in February, the lowest pace since June of 2010.